India doesn’t have a Social Security system unlike the developed world and the onus for saving for our retirement is on Individuals. While the govt. has mandated Provident Fund and also created schemes like National Pension Schemes, the contributions to these are minimal.

They are also classified as ‘Debt category’ investments and return around 8% per annum (which just about beats inflation)

You need to invest a monthly amount in a growth asset like equity to create a significant corpus for your retirement.

Ideally, you should be saving about 10% of your monthly income towards your retirement corpus so that you have a significant chunk 20 to 30 years later.

Let’s say you are 25 years old and earn Rs 30,000 per month. If you invest Rs 2500 every month in SIPs, increasing it by 10% every year as your salary increases,  your savings can be anywhere between the amounts below:

  • Rs 4.12 crores when you turn 60 – This is at a balanced return of 12% per annum
  • Rs 7.2 crores when you turn 60 – This is at a slightly better return of 15% per annum

Wow, that’s quite a bit of money !

That’s what most folks think and assume that they won’t need such large sums so don’t start saving for retirement. However, not only will inflation drive up costs in the future, you are expected to live longer on account of better medical facilities so you will need money for a longer period of time.

Don’t wait for tomorrow to start investing for your Retirement. Start Today.